Even the middle of April still tends to be firm on early quarter investment inflows and quarterly corporate earnings report responses. It is no secret that 70% of all corporate earnings reports beat estimates each quarter regardless of economic conditions. That is due to downbeat original estimates, where earnings reports are then predictably a bit better than expected. The current Q1 2016 reports have been very typical in that regard.
Early April tends to be very firm on fresh quarterly investment inflows and upbeat quarterly corporate earnings report anticipation. After some very downbeat original estimates, those earnings reports have predictably been a bit better than expected. There will be quite a bit more influence from this fundamental aspect as the pace of earnings reports accelerates into this week.
The horrific Brussels terror attacks had a very limited impact last week. After the early week Advance PMI’s and other international influences, there was also a shift to much lighter economic data into the Easter holiday weekend in the West.
With more central bank influences on tap this week look for volatility to continue. The equities having a "Goldilocks" psychology at present is based on central bank accommodation offsetting the weak international economic data. This worked well after the European Central Bank meeting on Thursday.